On Friday, Bitcoin managed to reach new record highs of around $6,000. This allowed it to push its market capitalization to nearly $100 billion at one point. It seems that investors are continuing to place their bets on an asset that is available in limited supply. Since the introduction of Bitcoin, a number of other crypto-currencies have cropped up in the market and are gaining traction. In this year alone, the original virtual currency has succeeded in gaining about 500 percent. It is significantly higher than any other tradable class asset. However, it is essential to remember that Bitcoin is quite volatile. It has posted losses and profits as high as 16 percent and 26 percent respectively on a given day.
The currency managed to reach the record pick of $6000 on Friday on the BitStamp platform. It was last 4.7 percent high at $5, 964.24. Investors who choose to purchase Bitcoin have the option of holding onto it as an investment. Or they can use the digital currency as a foundation future application via its underlying technology called blockchain. This is basically a digital ledger for recording transactions. However, this currency is very much limited in supply and most people are not aware of it.
How the Surge in Bitcoin Price Occurred
21 million is the cap, which means that this is the maximum number of Bitcoins that will ever be in existence. According to analysts, the surge in price on Friday occurred due to a combination of factors. Co-founder of London-based Cryptocompare, a data analysis website, Charles Hayter said that certain factors helped Bitcoin’s cause. One fact was hopes that there would be a change in China’s stance on crypto-currencies. He said that as fears concerning China faded, the price had been unlocked. This had driven demand because more buyers were now entering the market.
The practice of raising capital by selling tokens to the public in initial coin offerings was on rise. China banned the practice and it also ordered a shutdown of exchanges of digital currencies. Nonetheless, many people believe that this ban is only a temporary one. Some experts said that the country wouldn’t want to be left out of the development of general development of blockchain applications or the digital currency market. China conducts almost 60 percent of the Bitcoin mining in the world. Due to this most of the large investments in ICO projects are also coming from the country’s crypto-currency holders.
Some experts also believe that a number of investors have also chosen to go back to Bitcoin for certain reason. This reason can be the global regulatory environment pertaining to crypto currencies remain uncertain still. The ICO craze played a vital role in the recent surge experienced by Bitcoin as it had exploded in this very year. People purchase these tokens for these initial coin offerings with the use of Bitcoin and another digital currency, Ether. It is safe to say that Bitcoin seems to have a profitable future.